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Gift Taxes

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Marian Said:

What amount can you receive as a gift, without having to claim as taxes?

We Answered:

There is no Federal tax on gifts or inheritance for the person who receives the gift or inheritance. Some states do have such a tax. The giver must report the gift if it exceeds $12,000 ($24,000 if they are married and file a joint return. It will not have an effect on the givers tax until they die. In that case it would effect their estate tax if they have an estate in excess of $2 million (if they die in 2006, that number changes frequently).

Debra Said:

If I receive 1 million dollars as a gift do I have to pay taxes on it?

We Answered:

You will owe taxes on all but the first 10,000. Which is the amount of a gift that is not taxable.

Lynn Said:

Do I have to pay taxes on a gift from my father?

We Answered:

It depends how the will was set up.

If the money was left to your father and he choose to give some of it to you, then he may have to report gift taxes since the amount he gave you exceeds $13,000. You won't owe anything, and he won't owe anything unless he has exceeded the $1 million lifetime exemption.

If the will specified your father as the administrator or trustee of the estate, but the money was left directly to you, then you don't owe any taxes. Its not considered a gift nor is it income. The estate needs to report and pay estate taxes as required, then any money that is left AFTER the estate tax is paid can be distributed to the beneficiaries of the will, with no additional taxes.

Estate taxes can be complicated. I highly recommend you have an attorney look over everything just to make sure you (or your father) doesn't miss anything. A few hundred dollars in attorney's fees is cheap insurance compared to tens of thousands of dollars in potential fines and penalties if something isn't reported properly. The attorney can be paid from the estate.

Lillie Said:

How much are taxes on a gift of cash?

We Answered:

The donor of the gift pays the tax. Bona-fide gifts are always tax-free to the recipient.

There is an annual exclusion of $12,000 per donor, per recipient. If a donor gives more than that to any ONE recipient then a Gift Tax return is required. Whether or not any Gift Tax will be due will depend upon the giver's lifetime gifting status. Currently the unified lifetime credit (linked to the Estate Tax exclusion) is $1,000,000. Until a donor has given taxable gifts that exceed both the $12,000 annual exclusion AND the unified lifetime credit amount, not tax will be due.

Because of the unified lifetime credit and the linkage of the credit to the Estate Tax exclusion, gift givers must keep permanent records of all gifts given and Gift Tax returns filed. The executor of their estate will need those when calculating any Federal Estate Tax due after they pass.

Kimberly Said:

will I have to pay taxes on a home that was a gift?

We Answered:

Hello, Becka! According to the IRS (see the first two links), only the GIVER of cash or property may be subject to gift taxes (if the gift is over $12,000), so you (as the recipient) will not owe any taxes upon receipt of the home.

However, although you pay no tax in receiving the home, you should still be careful to note the following in your records:

1) the FMV of the home on the date of the gift
2) the giver's adjusted basis in the home (including any gift tax paid on the appreciation of the property)

You will need this information when you sell the home to determine how much (if any) of your gain is taxable. Please check out the latter IRS links for details. Good luck! :-)

Monica Said:

What is the limit on a monetary gift you can receive in one year and not have to pay taxes?

We Answered:

First, each parent can "gift" $12,000 tax free per year. Since we are in Nov, if his dad give $24,000 in '08 and $24,000 in '09 the tax will be minimal on the remaining $2,000.
Second, the tax is paid fy the donor not the donee(the person who give the gift).
Third, why would one report the gift in the first place?

Kimberly Said:

How should $40K in gift money for a first time home purchase be distibuted to avoid taxes?

We Answered:

You have no tax consequences from the gift although your in-laws might as gift taxes are assessed on the donor, not the recipient. The annual Gift Tax exclusion amount is currently $12,000 per recipient for each donor. To avoid the Gift Tax, they each can give you and your wife $20,000. Bingo, no Gift Tax. Your Ad Here

Discuss It!

mulberry replica said:

The donor of the gift pays the tax. Bona-fide gifts are always tax-free to the recipient.

best dissertation services said:

Thoughtful and informative updates about tax which are important to get paid. The people who pay taxes every year they must get some gift in return as well. I like that suggestion and the government must think about it.